Vietnam Shows Improvement in Global Competitiveness Report

Vietnam rose two spots in the World Economic Forum’s (WEF) Global Competitiveness Report 2014–2015. The country now ranks 68th out of 144 countries.

The WEF Competitiveness Report is the most comprehensive assessment of national competitiveness worldwide and “assesses the competitiveness landscape of 144 economies, providing insight into the drivers of their productivity and prosperity.”

Vietnam ranked best in the areas of labor markets and market size. Whilst the WEF pointed out that the labor market in the Asian region was generally poorly functioning, Vietnam was a bright spot, ranking 49th. The country’s market size ranked 34th.

According to the WEF, “following an episode of double-digit inflation in 2011, [Vietnam’s] macroeconomic situation continues to improve (75th, up 12 positions), as inflation declined to 6.6 percent.”
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Among the other positive areas covered by the report were:

• An improvement in public institutions (85th, up five)
• Better property rights protection (104th, up nine)
• Improved efficiency (91st, up 13)
• A decrease in the level of perceived corruption (109th, up seven)
• A small improvement in the quality of transport and energy infrastructure (81st)

However, the report was quick to point out that many of these improvements were the result of the country starting at a much lower level and therefore had much to improve upon still.

Additionally, the report also highlighted a number of problem areas for Vietnam. In particular, the country’s banks and financial system remain weak.

Additional problems included:

• A low level of technological readiness (99th, up three)
• Local businesses are slow to adopt the latest technologies (118th), resulting in loss of productivity
• A low level of business sophistication (106th, down eight), as evidenced by companies tending to operate at the bottom of the value chain

At the top of the rankings were the advanced Western economies and several Asian Tiger economies. Switzerland ranked at the top for the sixth consecutive year; Singapore was ranked second, followed by the United States.The WEF’s report can be accessed here.

This article was first published on Vietnam Briefing.

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